Toys R Us Wins Online Retail Suit Against Amazon.com

NEW YORK – Toys "R" Us Inc.said Thursday that its online arm prevailed in a lawsuit against Amazon.com Inc. (AMZN), severing a deal between the two and allowing Toysrus.com to run an independent retail Web site.

Amazon spokeswoman Patty Smith said the online retailer "strongly disagrees with the judge's ruling in this case" and is in the process of reviewing a number of options.

Shares of Amazon.com declined 1.3 percent to $36.63 after trading as low as $35.37.

Toys "R" Us signed a partnership agreement withAmazon.comin 2000, near the peak of the Internet bubble, to sell its toys, games and baby products on Amazon's site.

The deal was hailed as a model for futurebricks-n-clicks partnerships, and came as some industry watchers expected online retailers to overwhelm traditional bricks-and-mortar merchants.

But in 2004, Toysrus.com filed a lawsuit charging that Amazon.com violated its exclusive rights to sell those products on the site. It claimed that thousands of products in exclusive categories were being offered through rival retailers on the Amazon.com platform.

Amazon.com countered, saying Toysrus.com failed to live up to its end of the deal, by not keeping enough stock of top-selling items, and not selecting the top 1,000 toys and the top 500 baby products for sale.

On Thursday, Toys "R" Us said the verdict, which will be rendered today by the Chancery Court in New Jersey, severs the August 2000 agreement, and it expects to provide online access for its customers at www.toysrus.com.